Voice International – Voice of the Island Cyprus

Apparent price stability recorded after VAT on certain products went down to 0%

An apparent price stability is recorded a month after the government cut the VAT on certain products down to 0 per cent as a measure to combat the Mediterranean island’s inflation.

The products were milk, bread, eggs, baby food, children’s nappies, adult nappies, and feminine hygiene products all of which will have no VAT for six months.

This is what Philenews reported on Monday, adding that prices for this category of products had risen sharply within a year.

In particular, increases of 14% were recorded for fresh milk, 32% for baby diapers, 23% for baby food and infant formula, 27% for eggs, 20% for bread and 8% for feminine hygiene products.

The government’s decision to impose a zero rate of VAT on the above products until October 31, 2023, has led to price reductions, with families with very young children being the main beneficiaries. The reduced rate is from 19% to zero on nappies.

However, there was no shortage of obstacles as it appears that price reductions coincided with parallel increases by suppliers just before the measure was implemented in four of the seven categories where the rate was zeroed.

These are baby food, infant formula and nappies – both children’s and adult ones.

As expected, there is price variation from store to store for the same type of products, so consumers should be particularly careful where they shop and make the best choices based on their own research.

Head of the Consumer Protection Service Constantinos Karagiorgis has confirmed they had received some complaints from consumers, mainly concerning baby nappies and baby food prices.

Karagiorgis also noted that suppliers abroad have increased the prices of some products three times since September 2022, due to shortages caused by a drop in production, reduced stock, a significant increase in the price of raw material (wheat) and a decrease in supply routes to Cyprus, combined with a rise in freight rates from Europe by 8-10%.

( Source: In -Cyprus)

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